A federal judge has rejected a joint bid by Gemini and the Commodity Futures Trading Commission to scrap the crypto exchange's $5 million settlement, ruling that the regulator's change of heart cannot unwind a finished court judgment.

Judge Alvin Hellerstein ruled Thursday that the CFTC's reversal on the case did not justify undoing the January 2025 agreement. He also dismissed Gemini's claim that regulators had coerced it into settling in the first place.

The Winklevoss twins founded the exchange. Cameron and Tyler Winklevoss built Gemini into one of the most recognizable names in American crypto. Now it must live with a court order it no longer wants and a settlement both parties tried to erase.

What did the judge actually decide?

Hellerstein kept two things alive. First, the $5 million payment — already made, according to court records. Second, an injunction barring Gemini from misleading the CFTC or publicly denying the settlement's findings.

His reasoning cut at Gemini's coercion argument. The exchange fought the case for three years, then settled three weeks before trial. That timeline, the judge suggested, reads as strategy rather than duress.

"Gemini litigated the case for approximately three years, and then, despite the preceding facts, made the calculated decision to settle the case shortly before trial," Hellerstein wrote.

The CFTC sued Gemini in 2023. The regulator alleged the exchange misled it during a 2017 review of a proposed bitcoin futures contract. Gemini settled without admitting or denying the allegations. It has not responded to a request for comment on Thursday's ruling.

Why the CFTC wanted its own case undone

Here is the unusual part. The CFTC joined Gemini in asking the court to vacate the settlement, saying the case should never have been brought. Under the current, friendlier posture toward crypto in Washington D.C., the regulator moved to reverse course on an enforcement action it had itself initiated.

The court said no. The message is straightforward: a shift in regulatory attitude is not retroactive. Finished judgments stay finished, even when both sides agree they should disappear.

That principle matters beyond Gemini. Dozens of crypto firms settled with U.S. regulators during the enforcement-heavy years of 2021 through 2024. Some of those firms have asked whether a changed political climate might scrub their records clean. Hellerstein's ruling suggests the answer, at least in the Southern District of New York, is that courts will not rubber-stamp retroactive forgiveness.

What does this change for Gemini's business?

Not as much as you might think. The exchange can still operate in the United States. It can still launch new products. The settlement terms bind, but they do not block normal commercial activity.

The real constraint is reputational and operational. Gemini cannot publicly deny the findings of the 2025 settlement. It remains under a standing court order tied to truthful dealings with the CFTC. Any future product launch touching regulated derivatives will happen under that shadow.

The timing is awkward. Earlier this year, Gemini announced it would exit the U.K., the European Union and Australia, and cut 25% of its workforce. The company said it would shift resources toward the U.S. market and prediction markets, while continuing to operate in Singapore.

So the exchange is doubling down on the one jurisdiction where it carries a permanent, court-affixed mark. The settlement its leadership tried to erase will follow it into every future negotiation with American regulators.

What comes next

Gemini's options now narrow. It can accept the ruling and operate under the 2025 terms, or it can appeal Hellerstein's decision to a higher court — a path that would extend litigation it already spent three years trying to end. Either way, the judgment stands unless an appellate court says otherwise, and the episode sets a precedent other settling crypto firms will study before betting on a friendlier Washington to rewrite their past.